Gas Market Monitor - The interplay of geopolitical risks, weather, and market dynamics
European TTF prices witness a surge fuelled by the end of the transit agreement through Ukraine, adverse weather conditions, and escalation of geopolitical risks. Storage withdrawal rate has been high with low LNG imports and the halt of Russian flow through Ukraine inducing uncertainty and strong volatility. The bullish sentiment is still dominating the market following concerns of a timely summer refill. Geopolitics remain the main driver for volatility especially with intended measures by the new US administration affecting trade flows and growth. In addition, prices will be highly responsive to any developments concerning the Ukrainian war. The market remains responsive to factors affecting demand in Europe or key LNG competitors in Asia such as adverse weather conditions, along with supply disruptions from key suppliers such Norway or the US. We expect prices to remain elevated in Q1 of 2025. Subsequently, we foresee prices to cool off a bit during the summer period, but remain above seasonal averages, before heading to 40 EUR/MWh by the end of year.